Bring down prices of commodities

It is a relief to see that the Trading Corporation of Bangladesh (TCB) has decreased the price of edible oil by Tk10 a litre as the price has fallen in the international market. There have been very few instances of prices of essential items coming down in line with the prices in the international market. Earlier, the government decreased the price of soybean oil by Tk10 per litre and palm oil by Tk2 a litre ahead of Eid-ul-Adha.

TCB fixed the new price of edible oil at Tk100 a litre. It will come into effect from next Wednesday, said a press release on Monday. The prices of lentils and sugar have remained unchanged. However, the government is mulling over a plan to lower the prices of some other daily essential products in a few days. Though people sighed relief at the news on Tuesday the prices should have come down much earlier.

Global commodity prices have declined over the past 13 consecutive months but it has been otherwise in our country. So far the government has increased the prices of commodity products under the excuse of their hikes in the international market. But as the prices began to fall in the international market our country has experienced just the opposite. If we take wheat, a highly import-based commodity, as an example we see the price of the grain has fallen by 35 per cent in a year in the international market.

But in our country, the same commodity has seen a 25 per cent rise during the same period. In the case of lentils, we have had the same experience. We are not quite positive about the government’s decision because the extent of the decline in the price of commodities is much less in our country than in the international market. Over the last year, the price of soybean oil has dropped by 44 per cent. Is it the same in Bangladesh? Bangladesh hasn’t seen a 44 per cent drop in the price of the oil.

Naturally, it has brought forth the question as to why the prices of commodities in Bangladesh have not dropped in line with the decline in the prices in the international market. Business analysts think that increased import costs due to the devaluation of money against the dollar along with hikes in the price of gas, electricity and energy are the key reasons. Frequent rises in the prices of gas and electricity have had a domino effect causing the price of commodities to go up.

Analysts also point out that a lack of competitive environment, control of major commodity imports by a few players, collusion among market participants, and a high profiteering tendency among businesses in the supply chain amid inadequate monitoring and enforcement by public agencies have compelled consumers to pay more.

The Centre for Policy Dialogue (CPD) in its review of the economy last month said importers argue that their current stocks were purchased at higher costs, preventing them from immediately lowering prices in response to a drop in global rates.

Indeed, they can’t bring the prices down immediately. But how long should it take? Should it take 13 months since the prices began to drop? If it is true then it is also true that traders shouldn’t push up the prices immediately after the prices go up in the international market. They should have their old stocks. But we see it otherwise. As soon as the prices go up globally they take no time to increase the prices of commodities. We hope the government and the TCB will bring down the prices of commodities commensurate with the global market.